Comity Admission

Using the term “Tennesentric” would probably be more efficient, but two items involving potential rule revisions relating to ethics and lawyering in Tennessee are worth briefly discussing. One of the two has gone out for public comment and has a deadline, while the other has just been filed with the Court and does not.

I’ve written at length in the past about Tennessee’s effort at cleaning up some problems with comity admission standards and the extended amnesty period for certain folks in need of getting properly registered as in-house counsel.

Our Board of Law Examiners has recently filed a petition, which the Court has put out for public comment, to further extend the dates and deadlines for folks to have gotten into compliance in these areas. Interestingly, the Petition seeks to extend the time period but not all the way up until the petition itself was filed, but rather has sought a cut-off period that would be December 31, 2016. If enacted, the impact of this rule change would appear to be to make amnesty available to in-house counsel who did not get into compliance by July 2016 but who would have if the deadline for compliance was December 31, 2016 and to afford the Board with the same flexibility in making rulings on comity applications that were filed as late as December 31, 2016 but for which the Board didn’t rule – for obvious reasons – before the end of the year. The deadline for public comments on that proposal is April 14, 2017.

The other proposal – which has not yet been put out for public comment — is a filing by our Board of Professional Responsibility to clarify in our Rule 9 itself that the hearing in a disciplinary proceeding is public, unless a protective order is obtained. This has long been the practice, but the rules presently do not exactly say that. If this petition is granted, the result would be that the rules would bless the traditional practice. But one even better benefit of this revision, if adopted, is important for cases of potential public and media interest, because this would make clear that the Tenn. Sup. Ct. R. 30 Media Guidelines ought to govern media coverage of such proceedings. Such a clarification would be important so that hearing panels in Tennessee understand that the attorneys of record in a case are entitled to know of a request for media coverage so that counsel can then proceed to make a timely motion to seek to prohibit such coverage under the terms of Rule 30.

Yesterday, the Tennessee Supreme Court entered an order that addresses a variety of issues I have written about on a number of prior occasions. You can take in the entire order setting out all of the new provisions here. In addition to making a spot change to Tennessee Supreme Court Rule 6 and a revision to RPC 5.5(d), it replaces Tennessee Supreme Court Rule 7 in its entirety.

In almost all respects, the Court’s action offers the hoped for outcomes on a variety of issues plaguing Tennessee’s admission system for lawyers licensed in other jurisdictions. The contents of the new rule becomes effective in just 11 days, on January 1, 2016.

As to comity admission, the Court has removed the requirement it had added into Section 5.01 that conditioned eligibility for comity admission upon having both applied for it, and being approved for it, before moving to Tennessee to be employed as a lawyer. Effective January 1, 2016, Section 5.01 will no longer say anything along those lines (and in fact does not even explicitly require the application be submitted before arrival in Tennessee).

The Court also had adopted a robust practice pending admission provision that will permit applicants awaiting a ruling on their comity application to practice law in Tennessee for up to 365 days. The provision is largely patterned after the ABA Model provision on the topic and requires the applicant to “associate[] with a lawyer who is admitted to practice in Tennessee.”

With respect to in-house counsel registration, the order provides a second round of amnesty so that any lawyers, currently employed as in-house counsel in Tennessee but who are not licensed here and did not get properly registered before now, can have any prior sins in this respect forgiven as long as they get an in-house counsel registration application filed within 180 days from January 1, 2016 (June 30, 2016). Accompanying this change is a revision to RPC 5.5(d) to add a (3) that more prominently explains the repercussions in the future for any in-house counsel who fails to make timely advantage of this amnesty (and for any in-house counsel who may arrive in Tennessee in the future and miss the 180-day registration deadline). The Court also took this opportunity to make explicit what was previously just strongly implied — that an in-house counsel who gets their application in timely (i.e. on day 175 for example, need not worry that the work they do during days 1-174 is somehow UPL.

The Court also took favorable action on a request made to make it easier for the spouses of those in military service to become admitted in Tennessee. The Court took something of a compromise position between a proposal made by military spouses and a counter-proposal offered by the TBA – offering a 2-year initial license period with the ability to renew for additional 1-year periods provided the initial requirements for obtaining the license remain in place.

Additionally, and importantly, for a number of lawyers with comity applications that have been pending or on hold or otherwise stuck in the system while these long discussed changes have been under consideration, the Court has adopted a specific provision addressing the transition period from the old rule to the new rule as to comity admissions and that reads as follows:

(i) Transitional Provision. From January 1, 2016, and continuing through December 31, 2016, the Board is authorized to exercise its discretion in adjudicating pending applications for comity admission that have not been finally ruled upon as of the effective date (January 1, 2016) of this revised Rule. Such discretion includes waiving or altering time periods or otherwise varying the provisions for admission by comity, and the Board shall tailor such discretion toward granting the applicant’s application for comity admission as long as the Board otherwise reaches the conclusion that the lawyer possesses the character and fitness to practice law in this jurisdiction.

While the transitional provision is very helpful, it does not go quite as far as what was proposed by the TBA. The TBA had sought for the Court to adopt language that would have read as follows:

From and after [January 1, 2016] and continuing until [December 31, 2016], the Court specifically directs the Board of Law Examiners to use discretion in adjudicating pending applications that have not been finally ruled upon, including waiving or altering time periods or otherwise varying provisions, to tailor such discretion toward granting the applicant’s application for comity admission as long as the Board otherwise reaches the conclusion that the lawyer possesses the character and fitness to practice law in this jurisdiction.

The difference likely does not affect a horde of folks but there may be lawyers out there who had held off filing comity applications while awaiting a ruling who now may wonder whether they must apply in the next ten days to take full advantage of these changes. It also may be less than clear whether any lawyers with currently pending comity applications but who already have offices in Tennessee will be permitted to take full advantage of the practice pending admission provision because of the specific language of the transition provision. Thus, there may be situations out there that will still fall within some gaps in the working of the rule moving forward. (There also are some grounds to criticize other aspects of the rules requirements on public policy grounds — questions such as whether the change in the rule to now require someone who went to law school in a foreign country but wishes to sit for the Tennessee Bar exam has to first obtain an LLM in the United States are too restrictive.)

But, on the whole, there can be no question that the entry of the Court’s order yesterday is a good outcome.

Now, the anecdote. (And by Friedmanesque, I mean Tom the columnist not Monroe the ethics lawyer, so the spelling is correct.) I mentioned in an earlier post that I would be moderating a panel discussion at the AON Law Firm Syposium in Phoenix on issues of law firms dealing with aging lawyers. That event happened last week.

Because I had agreed to speak to another group the next day, I had to depart in the late afternoon to make a flight. Perhaps because of the time of the day, I won the Super Shuttle lottery. Some of you may be familiar with the particular company, but surely all of you are familiar with the “shared ride” service where you save a few bucks on transportation cost to get from the airport to your hotel, or vice versa. The trade-off is that instead of your own cab and a straight shot to the airport you end up sharing the ride with 5 or 6 strangers, and making multiple stops to pick up or drop off all of those folks on the way to your intended destination.

Well, I scheduled a ride with Super Shuttle to save my law firm a few bucks on transportation and ended up being the only passenger. This meant not only smooth sailing but an interesting conversation with the driver which, because it focused entirely on questions of legal ethics, I will share in part with you.

The driver, perhaps because of how I was dressed or aware of the AON conference taking place at the resort or both, rightly identified me as a lawyer. He then said he wanted to ask me a question: “Why do lawyers do such bad things to clients, like stealing and lying? They know what’s right and what’s wrong but yet they do what’s wrong.” At that point, he didn’t know that ethics issues were in my wheelhouse, so I explained part of what I do and then we had what was (I think) a better-than-average conversation on the subject.

We covered whether lawyers engage in wrongdoing more or less than other human beings. (I hold to my belief that the answer to that is no.) We explored the idea that the “stressful profession” concept isn’t a very good excuse because almost everyone’s job is stressful to some degree and lots of people who engage in manual labor all day would trade the stress of their lives for the stress of a lawyer. We talked about the fact that many lawyers, as a result of trust accounts and the like, have a lot easier access to commit financial wrongdoing than a lot of other people do. As an example, I mentioned that if he had some sort of addiction to feed, he’d have a harder time stealing from me in his shuttle than a lawyer with ready access to other people’s entrusted funds would.

By the end, we hit one point that I don’t think I’d ever fully talked through before where lawyers might be a bit unique — we’re all educated to understand that there must be at least two sides to every story. Thus, it might actually be a bit easier for lawyers to convince themselves to choose the wrong course of action over the right course of action, despite knowing which one is which, by gaming through the contrary point of view and using the skill set inculcated in them albeit skewed pretty heavily by the filter of their own immediate self-interest. I’m not sure that this hypothesis is anything more than an exercise of pop psychology by someone without the appropriate degree but the same underlying principle does appear to drive behavior that I see when very competent, successful lawyers attempt to represent themselves in their own unpleasant legal situations. They make decisions and arguments that they would never let a client they were representing undertake and often manage to allow their emotions to overwhelm them in a way that would never happen if they could objectively evaluate their own situation.

When people talk about the future of legal ethics in the United States, it is always helpful to engage them in a dialogue about what purpose they think the regulation of lawyers is meant to serve. If you and the other person do not agree on what the purposes to be served are supposed to be, then you likely are not going to agree on what to do with respect to a particular regulatory issue. Our profession is certainly not monolithic (and perhaps fairly described as even a bit bi-polar) on the answer to the question of what lawyer regulation is supposed to accomplish.

This month bring us a nice example of developments in two different states that could impact the future of legal ethics and that present a pretty stark contrast about some core underlying concepts of why we regulate lawyers.

In Florida, a public forum was held about something that many, many U.S. jurisdictions see as a pretty, benign, and common sense concept – allowing some lawyers from other jurisdictions to become admitted to practice in your state without having to take the bar exam (admission by comity). In Tennessee, for example, although I have written repeatedly about a flaw embedded in our rule as a result of past revision by our Court and that hopefully is in the process of being fixed, we do embrace in our state the core concept of making admission by comity available generally to lawyers licensed in at least one other U.S. jurisdiction, who have been practicing law for a certain amount of time (we use 5 of the last 7 years), and who can otherwise meet character and fitness requirements. We also don’t require that your jurisdiction reciprocate.

Florida does not make admission by comity available, and a current proposal to do so according to this story from the ABA Journal is being met with pretty vociferous opposition. The quotes from the lawyers at the meeting who were in opposition and willing to say so publicly are quite telling on a few fronts, including a view of the purpose to be served by lawyer regulation.

One lawyer is quoted as stressing the “unique laws” that Florida has. But the same can be said about almost every state. Another lawyer disparaged the concept that Florida lawyers might want to gain the benefit of reciprocity to practice in such locales as Arkansas, Idaho, and Kansas, referring to them in words that if a sarcasm font existed would be printed using that font – “legal powerhouses.” And, yet, the lawyer quoted at most length, and who the story pegs as reflecting the sentiment of most of the lawyers in attendance at the forum, speaks a language in which lawyer regulations exist as much, if not more, for the very parochial interest of protecting lawyers from competition than for the purpose of protecting clients.

Forty-nine percent of law school grads can’t find long-term jobs. I ask you to search the Internet and find stories about shortages of lawyers in Florida. There are none. There are no concrete facts to explain why reciprocity would be good for our [bar] members or for the citizens the Florida Bar is serving.

On the other side of the country, Law360 gives us a story about a Colorado initiative aimed at establishing more “proactive” regulations patterned after a regulatory approach that began in Australia and has expanded elsewhere. The Colorado initiative discussed in the article would have as its goal not punishing lawyers after they engage in misconduct or make mistakes that hurt clients but “spotting practice problems and working with lawyers to fix them before a client is hurt.” I have been fortunate enough to be involved on a panel in the past with Professor Fortney who is quoted at length in this article and who has written extensively about what has gone on in Australia and “education toward compliance” strategies. You can read some of her writing on the subject here.

If you believe, as I do, that the goal for lawyer regulation should be drawing lines that work to protect and serve clients, then not only should you hope that the future of legal ethics doesn’t include further squabbling over common-sense things like the removal of overly-parochial restrictions on comity admission but also, and more importantly, the kind of movement in the regulatory system Colorado is contemplating.

In that respect, the good news is that the Law360 news item also includes quotes from powers-that-be in Illinois and D.C. that paint a potentially bright future for proactive regulatory approaches as a trend rather than an anomaly.

Over the last few months, I have posted on several occasions about the petition pending before the Tennessee Supreme Court seeking some significant changes to the rules in Tennessee regarding admission of attorneys to practice in a variety of contexts. If you are new to the blog, you can get up to speed on this issue here and here.

In advance of the July 31 deadline for comments, the Tennessee Bar Association has filed a comment that is generally supportive but that, most importantly, proposes changes the Court should make before adopting that would improve upon the proposal. You can read the comment in its entirety and the TBA’s proposed redline revisions here.

As one of the lawyers who had the honor of drafting the comment, I can tell you in summary form that the TBA’s position backs the BLE proposal to remove the barrier to comity admission that exists in the current rule as a result of the requirement that a comity application be approved before beginning employment in Tennessee and backs the BLE”s request for a new amnesty period for in-house counsel registration compliance. The TBA also is proposing changes that would:

Result in a better practice pending admission rule that would be patterned after the ABA Model Rule on practice pending admission and which would, among other things, permit experienced lawyers moving to Tennessee licensed in another U.S. jurisdiction to practice for up to 365 days while waiting for approval of their comity application.

Result in explicit protection in the rules for the work that an in-house counsel does prior to putting in a registration application as long as the application is submitted timely within the first 180 days of employment.

Remove barriers to admission for military spouses who are attorneys licensed in jurisdictions other than Tennessee but in a less bulky way that would involve a renewable one-year temporary license.

Create a standard to be applied during a transition period in which applicants already in the pipeline who have been waiting during this uncertain period and who apply in the future while a ruling on this petition is awaited will not have strict timing issues held against them to deny admission but who will be blocked from admission only on grounds of true character and fitness concerns.

There is no set timeline for a ruling from the Court now that the deadline for comments has expired, but there are many lawyers who are hopeful that given the importance of these issues that the Court will act expeditiously.

On the military spouse admission issue, you can read the collection of separately-filed comments on that rule proposal here. Interestingly, only one entity appears to have filed a public comment in complete opposition, the Montgomery County Bar Association, Clarksville – the city in Tennessee home to the largest military base in our state is located in Montgomery County.

Currently, Section 5.01 of Rule 7 provides that a lawyer’s comity application “shall be submitted to the Board of Law Examiners and approvedprior to commencement of law business in Tennessee or employment as a lawyer in Tennessee.” (Emphasis added). There is a significant gap in time between when a lawyer sends in their comity application and the date, if ever, it receives approval, i.e. the license is granted. Even for a lawyer with a spotless track-record, we are talking about a process (which includes having to go through all of the National Conference of Bar Examiners red tape) measured in months not days. Thus, if approval has to be obtained before you can start practicing law in Tennessee, then the practical result is that the only people who could comply with existing language of the rule are people who decide to seek comity admission in Tennessee long before they have any kind of job opportunity in Tennessee that would give them reason to do so.

For people whose interest in becoming licensed to practice in Tennessee happens in the more normal fashion, the rule is simply unworkable. This is easily demonstrated with a hypothetical involving a not all that imaginative scenario. Lawyer who has been practicing law for 10 years in Wisconsin gets a job offer to come join a Tennessee law firm. Once the lawyer communicates to Tennessee firm that she is taking the offer, the firm will want the lawyer to move as quickly as possible for obvious reasons. Yet, under Rule 7, unless the Wisconsin lawyer waits the many months necessary for her application to be approved before moving to Tennessee and beginning work for the Tennessee firm, the Wisconsin lawyer will lose eligibility to get comity admission and would, instead, have to try to sit for the bar exam. In the meantime, thanks to a Board of Professional Responsibility opinion addressing the impact of Section 5.01 of Rule 7, it would be unclear what, if anything, the Wisconsin lawyer could do in Tennessee in terms of work without being subject to accusations of engaging in the unauthorized practice of law.

The BLE’s pending petition seeks to delete this language in Section 5.01 of Rule 7, a very positive development. Presumably, if only that were accomplished, then perhaps the workable regime for handling such lateral movement long recognized in Tennessee under a prior BPR Formal Ethics Opinion would be back in the mix, and it would at least be clear again that the Wisconsin lawyer could function and contribute to some extent by working at the Tennessee law firm while waiting on approval of her application for admission.

The BLE petition goes further, however, and seeks to introduce a practice pending admission concept that would permit people our Wisconsin lawyer under the supervision of a Tennessee lawyer. The only problem with the BLE proposal is that it takes a one-size fits all approach and attempts to expand an existing provision of Rule 7 focused on, and designed for, brand new law school graduates and employs the same approach to much more seasoned lawyers.

Personally, I think that a better working template would be something closer aligned to the ABA Model Rule regarding practice pending admission for lawyers eligible to seek comity admission. The ABA approach would provide our hypothetical Wisconsin lawyer with a roughly one-year window of time to engage in practice in Tennessee while waiting on the administrative process to play out. The ABA approach, however, also requires lawyers exercising this time-limited opportunity to practice pending admission to make the disciplinary authorities in Tennessee aware that the Wisconsin lawyer is here practicing law. Such an approach would much more realistically address the reality of lawyer mobility, allow Tennessee law firms to better compete for talent currently located out-of-state, and still would in no way sacrifice client protections or limit the ability of disciplinary counsel to take action against lawyers who engage in unethical conduct while their admission application is pending.

No, not in any of the ways that would be fodder for jokes or insults directed at lawyers. This is actually another follow-up post of thoughts on an aspect of the BLE’s petition for changes to Rule 7 that I first discussed here. And despite the “click-bait” nature of the title of the post, there is a legitimate point to be made (at least I think so).

The answer is that the best definition of each may just be what Justice Potter said as to one of them — “I know it when I see it.”

As part of its proposed revisions to Rule 7, the BLE now seeks to make a wholesale replacement to the existing language in Section 5.01 that currently adds things to Tennessee’s statutory definitions of “law business” and “practice of law” for purposes of determining eligibility for comity admission. Those two terms are defined in Tenn. Code Ann. 23-3-101, but the focus there is on acts the state legislature has decreed are the unauthorized practice of law if performed in Tennessee by people without law licenses. I do not think many would argue that the statute provides comprehensive definitions of the things lawyers do by any stretch.

Currently, Section 5.01 adds to those definitions in ways that may not be perfect but hardly seem broken. Since Section 5.01 focuses on lawyers who would be trying to become licensed in Tennessee, it cannot just rely on our state’s statutory definitions of the terms since those necessarily wouldn’t apply or be the same as the definition of such terms in the lawyer’s home jurisdiction. The rule currently adds several, entirely uncontroversial endeavors that qualify: full-time employment in private or public law practice, being actively engaged in teaching law full-time as a law professor, and then gives the BLE discretion to consider other types of full-time employment requiring application of legal knowledge and interpretation of the law.

Now, the BLE seeks to have all this changed with the creation of a new defined term of “active practice of law” that appears to me to very curiously lessen the BLE’s discretion. The first subpart of the BLE’s proposed section on “active practice of law” appears fine as it reiterates that working as a private practice lawyer, public practice lawyer, judge, judicial law clerk, or professor fits, but the second subpart then raises real questions.

It is in that subpart that the BLE adds this language: “Notwithstanding the foregoing, the ‘active practice of law’ is further defined to require that at all times in the durational period the applicant has: (1) held a law license in ‘active’ status; (2) spent one thousand (1,000) hours or more per year engaged in the practice of law, for each of the required five years in the durational period; and (3) derived at least fifty percent (50%) of non-investment income from the practice of law.” Nothing about the language of this limitation is clear that it would apply only to the second subpart. Thus, this definition of “active practice of law” would appear to modify all of the categories.

As to judges, why should it matter if they have their law license in their home jurisdiction in an “inactive” status either to save money or because they aren’t allowed to practice law in their home state while serving as a judge for instance? For other categories, why should the concept of 1000 hours of work be set in stone as a benchmark for whether you are in the “active” practice of law in a calendar year? Perhaps that makes sense if you work under a strict billable hour regime, but what if you have only a plaintiff’s practice and handle just 4 or 5 cases in a year, win each of them, and do so in an efficient way where you only worked say 800 hours that year? Is the BLE really going to stake out a position that such a year should not count because that wasn’t the “active” practice of law? Would it matter if the hypothetical lawyer was taking it easy that year because she’d worked 2000 to 2500 hours for several preceding years, was flush with cash, and now being more selective in choosing new cases to take on? And, how exactly is a lawyer who doesn’t keep time records (as some plaintiff’s lawyers do not) ever going to prove whether they worked 1,000 hours in a given year?

Although all of this presumably only matters for purposes of calculating the 5 of last 7 years requirement so as to be eligible for comity admission (i.e. without having to sit for the bar examination), the wisdom of the BLE’s proposal is something I am presently struggling with. And, at this point then it seems like wholly unnecessary micromanagement of something that is far too difficult to define in a rule.

This will be the first of several more in-depth entries focused on the Board of Law Examiners’ petition seeking some changes to Tenn. Sup. Ct. R. 7, which deals with a collection of licensing issues in Tennessee. (This will also be one of those less frequent posts where I may not adhere strictly to my commitment to tell you what you need to know in a bite-sized portion requiring 6 minutes or fewer of your time.)

One of the two headline changes proposed in the petition is the creation of a new amnesty period for in-house counsel registration. If adopted, Section 10.04 of Rule 7 would be amended to provide that any in-house counsel not currently licensed or properly registered in Tennessee would have another 180 days from the date the rule change is adopted to put in the proper paperwork to obtain a registration license.

Some background of note: it has now been almost 13 years since the Tennessee Supreme Court made clear that a lawyer who was working as in-house counsel for a company based in Tennessee needed to be licensed to practice law in Tennessee. Crews v. Buckman Labs, 78 S.W.3d 852 (Tenn. 2002). Despite that state of affairs, in 2009, it was known that there were many in-house counsel not in compliance and revisions to Rule 7 and to RPC 5.5 were adopted effective Jan. 1, 2010 that would permit in-house counsel licensed in another jurisdiction to obtain a registration license under which they would only be permitted to represent the company that employed them but would not have to otherwise become fully licensed. In order to make it easier for in-house lawyers already in Tennessee to get into compliance, those folks were given 180 days from adoption of the new rule to get their paperwork in and have their past transgressions absolved. These new rules also provided that, for in-house counsel coming to Tennessee in the future, they would have 180 days from the date they commenced their employment to get their application papers in for the in-house registration certificate.

Well, fast forward to the present day and for a variety of reasons, there are again quite a few in-house counsel in Tennessee who did not get their registration paperwork in within 180 days of commencing employment with a company in Tennessee. Some of the most sympathetic examples are lawyers who wanted to become full members of the bar and who submitted applications to be fully admitted by comity, not realizing that such applications were likely doomed because there was no corresponding 180-day grace period for that process.

Thus, faced with this situation in which there are quite a few in-house counsel who are gainfully employed by corporations in Tennessee that very much want these people to be their lawyers, the BLE has made this proposal that would give those folks a new 180-day window to turn in registration license paperwork and have their past transgressions absolved. I expect that this aspect of the BLE’s petition will be met with widespread support.

This proposal also contains two further things of note. The first is the BLE’s insistence that they will make positive efforts to educate in-house counsel on this situation and about the need to get the paperwork in within 180 days. The second is the proposal to move existing language from Comment [17] to RPC 5.5 up into the black-letter as a new RPC 5.5(d)(3). Simultaneously, an additional sentence is proposed that would go some distance in making clear that, for in-house counsel, there really is no other choice (if sitting for the bar examination is not desirable) than to first obtain a registration license and then, if something more is desired, to seek to get full admission by comity.

Depending on what type of law practice setting you work in, you may or may not be aware of the several ways in which Tennessee’s system for licensing lawyers is a bit … I believe the technical word is “broken.”